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WARRANTY-THE PRIVITY REQUIREMENT-PRODUCTS LIABILITY
COMMERCIAL CODE §2-318*-The Uniform Commercial Code was adopted by New Mexico in 1961.1 Section 2-318
of the Code reads as follows:
-UNIFORM
A Seller's warranty whether express or implied extends to any
natural person who is in the family or household of his buyer or who
is a guest in his home if it is reasonable to expect that such person
may use, consume or be affected by the goods and who is injured in
person by breach of the warranty. A seller may not exclude or limit
2
the operation of this section.
The New Mexico Supreme Court has not interpreted this section;
but recent decisions in Pennsylvania 3 and other jurisdictions,' the
purposeful omission of section 2-318 from the Code by the Cali-
fornia legislature, 5 and the sweeping changes made to section 2-3 18
by the Wyoming" and Virginia 7 legislatures demonstrate that section 2-318 should be reexamined and revised by New Mexico.
The question of whether privity of contract is essential to an action for breach of product warranty against the manufacturer has
been the subject of long controversy, resulting in a great number of
0 Hochgertel v. Canada Dry Corp., 409 Pa. 610, 187 A.2d 575 (1963); Yentzer v.
Taylor Wine Co., 414 Pa. 272, 199 A.2d 463 (1964).
1. New Mexico's version of the Uniform Commercial Code, N.M. Stat. Ann. §§ 50A-1101 to -9-507 (Repl. 1962), is based on the 1958 Official Text, promulgated jointly by
the American Law Institute and the National Conference of Commissioners on Uniform
State Laws.
All references to New Mexico's version of the Code, often designated "UCC" both
in footnotes and text, will omit the full statutory citation.
2. UCC § 2-318.
3. Hochgertel v. Canada Dry Corp., 409 Pa. 610, 187 A.2d 575 (1963); Yentzer v.
Taylor Wine Co., 414 Pa. 272, 199 A. 2d 463 (1964).
4. E.g., Henningsen v. Bloomfield Motors, Inc., 32 N.J. 358, 161 A.2d 69 (1960),
Annot., 75 A.L.R.2d 1 (1960) ; Green v. American Tobacco Co., 154 So. 2d 169 (Fla.
1963) ; Morrow v. Caloric Appliance Corp., 372 S.W. 2d 41 (Mo. 1963) ; Randy Knitwear, Inc., v. American Cyanamid Co., 11 N.Y. 2d 5, 181 N.E. 2d 399 (1962) ; Picker
X-Ray Corp. v. General Motors Corp., 185 A.2d 919 (D.C. Munic. Ct. App. 1962);
Peterson v. Lamb Rubber Co., 343 P.2d 261 (Cal. 2d Dist. Ct. App. 1959) (supporting
abandonment of privity in breach of warranty actions). But see Barnard v. Pennsylvania
Range Boiler Co., 216 F. Supp. 560 (E.D. Pa. 1963), in which Massachusetts law is interpreted as strictly requiring privity.
5. Cal. Commercial Code § 2318.
6. Wyo. Stat. Ann. § 34-2-218 (Supp. 1963).
7. Va. Acts 1964, ch. 219. The UCC becomes effective January 1, 1966. Virginia had
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1965]
COMMENTS
judicial decisions and a profuse literature. 8 The drafters of the
Code were prepared to abolish the privity requirement. The May,
1949 draft of the Code clearly did abolish it,9 and the Proposed
Final Draft retained the same provision.' 0 It was not until the publication of Proposed Final Draft No. 2 that the present wording
of section 2-318 appeared." In an understatement, the Editorial
Board of the American Law Institute indicated2 that a "minor
change of substance" had been made in the section.1
Pennsylvania became the first state to adopt the Code in 1953.'
dispensed with the privity requirement in 1962 by statute, Va. Stat. § 8-654.3 (Supp.
1962) which reads:
Lack of privity between plaintiff and defendant shall be no defense in any
action brought against the manufacturer or seller of goods to recover damages
for breach of warranty, express or implied, or for negligence, although the
plaintiff did not purchase the goods from the defendant, if the plaintiff was a
person whom the manufacturer or seller might reasonably have expected to use,
consume, or be affected by the goods; however, this section shall not be construed to affect any litigation pending at its effective date.
Except that the date "June twenty-nine, nineteen hundred sixty-two" is substituted for
the last words "at its effective date" above, the version of section 2-318 adopted by the
Virginia Assembly is identical with the above statute.
8. Prosser, The Assault Upon the Citadel (Strict Liability to the Consumer), 69
Yale L.J. 1099 (1960). [Hereinafter cited as The Assault.] In this prodigious article,
Dean Prosser makes over 900 citations to cases, and over 100 citations to law review
articles, treatises, and statutes. It is not appropriate for this comment to attempt reference
to the multitude of cases, articles, treatises, etc. The reader is referred to The Assault,
supra; Annot., 75 A.L.R.2d 39 (1961), and Annot., 74 A.L.R.2d 1111 (1960), for a
comprehensive listing.
9. UCC § 2-318, May 1949 Draft, reads:
A warranty whether express or implied extends to any natural person who
is in the family or household of the buyer or who is his guest or one whose
relationship to him to such as to make it reasonable to expect that such person
may use, consume or be affected by the goods and who is injured in person by
breach of warranty. A seller may not exclude or limit the operation of this
section.
Comment 1 reads in part as follows:
This section, following the dominant trend of judicial opinion developed in the
light of modern distribution . . . is intended to broaden the right and remedy
of the consumer in warranty, to free them from any technical rules to
'privity.'
Comment 2 says in part:
[E]mployees of an industrial consumer are covered.
10. UCC § 2-318, Proposed Final Draft (Spring 1950).
11. UCC § 2-318, Proposed Final Draft No. 2 (Spring 1951).
12. Ibid. The Symbol "AA" at the section is interpreted to mean "minor change of
substance" in the foreword.
13. Braucher, The Uniform Commercial Code-A Third Look, 14 W. Res. L. Rev.
7 (1962). At note 1, Mr. Braucher lists the first eighteen states to adopt the UCC in
chronological order.
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In that same year the Pennsylvania Supreme Court, in a frequently
cited case,' 4 approved the application of the res ipsa loquitur doctrine and the theory of exclusive control' 5 to an extent which resulted in shifting the burden of proof from the plaintiff to the defendant in nearly every action brought for injury arising from product defect. Although this was an oblique approach, the decision did
alleviate the problems faced by an injured party who was not in
privity with the seller or manufacturer. Some authorities concluded
that other decisions in Pennsylvania had completely abrogated the
requirement for privity in warranty cases.' 6 In 1959, the Superior
Court of Pennsylvania said:
A person, who after the purchase of a thing, has been damaged
because of its unfitness for the intended purpose may bring an action
in assumpsit against the manufacturer based on a breach of implied
warranty of fitness; and proof of a contractual relationship or privity
between the manufacturer and the purchaser is not necessary to im17
pose liability for the damage.
Dean Prosser seemed amply justified in saying that Pennsylvania
applied strict liability to the sale of food.' There was also some
justification for a conclusion that Pennsylvania had abandoned the
requirement of privity in all product warranty actions.
Section 2-318 of the Code frees from the technical requirements
of privity only the buyer's family, the members of his household,
and his guests.' Could it be interpreted that the section covered employees as members of his employer's "family" or "household"?
Dean Prosser in 1960 confidently predicted that when the case
turned up, the employee would be so considered.2 ° In 1960 the Cal14. Loch v. Confair, 373 Pa. 212, 93 A.2d 451 (1953).
15. The Assault, supra note 8, at 1114. In speaking of the doctrine of res ipsa loquitur,
Dean Prosser says that "Pennsylvania has a doctrine of 'exclusive control,' which has
the same effect." Id. at 1114, n.121.
16. Mannsz v. MacWhyte, 155 F.2d 445, 449-50 (3d Cir. 1946). The court, interpreting Pennsylvania law, said:
We think it clear that whether the approach to the problem be by way of
warranty or under the doctrine of negligence, the requirement of privity between
the injured party and the manufacturer of the product which has injured him
has been obliterated from the Pennsylvania law.
17. Jarnot v. Ford Motor Co., 191 Pa. Super. 422, 430, 156 A.2d 568, 572 (1959).
18. The Assault, supra note 8, at 1117, n.127.
19. UCC § 2-318.
20. The Assault, supra note 8, at 1142.
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1965]
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ifornia Supreme Court lent credence to this prediction by the statement that an "employee should be considered a member of the
industrial 'family' of the employer." 2
But in 1963 the Pennsylvania Supreme Court firmly disagreed
with Dean Prosser's confident prediction. In Hochgertel v. Canada
Dry Corp.,22 the court held:
It is clear from the language used [in § 2-318] that in order to
qualify as a person (not a buyer), who is within the protection of
the warranty, one must be a member of the buyer's family, his household or a guest in his home. An employee is definitely in none of these
23
categories.
The court refers by footnote to a Connecticut case 2 4 where it was
held that a maid was not a member of the buyer's household. Noting, however, that the Code was not intended to restrict the case
law in the field, the court made a study of "pertinent Pennsylvania
authorities ' 25 to determine whether warranty could be extended to
an employee. The court said:
[I]t is now established beyond argument in Pennsylvania that a
subpurchaser may sue the manufacturer directly in food cases for a
breach of implied warranty of fitness regardless of the lack of
privity. 26 (Emphasis added.)
In limitation of that rule, however, the court said:
In no case in Pennsylvania has recovery against the manufacturer
for breach of an implied warranty been extended beyond a purchaser
in the distributive chain. In fact, the inescapable conclusion from
Loch v. Confair, 361 Pa. 158, 63 A.2d 24 (1949), is that no warranty will be implied in favor of one who is not in the category of a
27
purchaser.
The court excepts from this limitation those individuals (members
of the buyer's family or household) within the extended coverage
21.
22.
23.
24.
25.
26.
27.
Peterson v. Lamb Rubber Co., 54 Cal. 2d 339, 348, 353 P.2d 575, 581 (1960).
409 Pa. 610,187 A.2d 575 (1963).
187 A.2d at 577.
Duart v. Axton-Cross Co., 19 Conn. Supp. 188, 110 A.2d 647 (C.P. 1963).
Hochgertel v. Canada Dry Corp., 409 Pa. 610, 187 A.2d 575, 578 (1963).
Ibid.
Ibid.
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of the Code.2 1 In its closing paragraph the court points out that it
considers the plaintiff to have an adequate remedy in trespass.2 9
One year after Hochgertel, the case of Yentzer v. Taylor Wine
Co.3 0 was brought before the Supreme Court of Pennsylvania. In
Yentzer, the plaintiff hotel manager, acting for his employer, purchased four bottles of champagne from a local liquor outlet. The
champagne was manufactured and bottled by the defendant, and
was intended for the consumption of hotel guests. While the plaintiff and other employees were preparing to serve the wine, a cork
from one of the bottles ejected and struck the plaintiff in the eye,
causing serious injury. The plaintiff brought suit, alleging breach of
implied warranties of fitness for the intended use and of safe packaging. The lower court found the decision in Hochgertel to be controlling and dismissed the complaint. The supreme court, however,
reversed on the ground that the plaintiff, as the actual buyer of the
champagne, was entitled to bring suit against the manufacturer for
breach of implied warranty, even though he acted as an employee
in purchasing the wine."
The supreme court noted that an employee was not a person to
whom the benefit of warranty extended under section 2-3 18, but
maintained that the statement of Pennsylvania case law granting
such benefit to the subpurchaser did not "foreclose the
inclusion of
' 82
the actual purchaser even though he be an employee.
28. Comment 3 to § 2-318 provides:
This section expressly includes as beneficiaries within its provisions the
family, household, and guests of the purchaser. Beyond this, the section is neutral
and is not intended to enlarge or restrict the developing case law on whether
the seller's warranties, given to his buyer who resells, extend to other persons
in the distributive chain.
The Pennsylvania Supreme Court's determination that the benefit of implied warranty
extended only to subpurchasers (in "food" cases) is in accord with a possible interpretation of Comment 3. The denial of any intention to enlarge or restrict case law as it affects
"other persons in the distributive chain" can be considered to limit the extension to
subpurchasers only. Pennsylvania had previously developed the position that subpurchasers in "food" cases were entitled to bring suit for product injury directly against
the manufacturer on the ground of implied warranty, and no enlargement or restriction
could be accomplished by the UCC. It can thus be argued that § 2-318 and Comment 3
provide no leeway which would allow courts to extend implied warranty protection to
persons, not within the specific provisions of § 2-318, who are not subpurchasers. See
Hochgertel v. Canada Dry Corp., 409 Pa. 610, 187 A.2d 575, 577 (1963).
29. 187 A.2d at 579.
30. 414 Pa. 272, 199 A.2d 463 (1964).
31. 199 A.2d at 464.
32. Ibid.
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1965]
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Relying upon the definition of "buyers" found in section 2-103 of
the Code,3 3 the supreme court found the plaintiff to be "clearly a
buyer" and "in the distributive chain." He was, therefore, under
Pennsylvania case law, entitled to the benefit of warranty and right
of action against the manufacturer. The transition of the position
of the plaintiff as a "buyer" under the Code to a "purchaser" protected under case law was made without comment or explanation.
This did not go unchallenged. Justice Eagan, with whom Chief Justice Bell joined, dissented vigorously. Justice Eagan called attention to the definitions of "purchase" and "purchaser" in section
1-201(32), (33) of the Code.3 4 He maintained that these definitions required creation of an interest in the property before the
taker could rightly be called a purchaser. An employee, buying on
behalf of his employer, obtained no interest in the property, and
could not be a purchaser.3 ' The dissent further alleges that "firmly
entrenched principles of agency law" deny that an employee who
buys for his employer can be a purchaser,"' and that the case is not
a "food" case, but is one bottomed upon inadequate packaging. The
majority opinion simply assumes that it is a "food" case.
The Supreme Court of Pennsylvania stated in Hochgertel the
firm principle that an employee is not one of the persons entitled
to the benefit of warranty protection either under the Code or the
case law of the state. The Yentzer case provides the first exception
to that rule; i.e., that an employee who buys a product for his employer is given the benefit of warranty as a "purchaser" under
Pennsylvania case law. Allowing the employee-buyer to bring suit
in warranty directly against the manufacturer, but excluding all
other employees of the purchaser, makes small sense if persons
most likely to use or consume the product are to have a right of
action directly against the manufacturer.
In discussing the development of strict liability in "food" cases,
Dean Prosser wrote:
33. UCC §2-103 (1) (a). The definition reads: 'Buyer' means a person who buys
or contracts to buy goods."
34. UCC § 1-201 (32) and (33). The definitions read:
"(32) 'Purchase' includes any taking by sale, discount, negotiation, mortgage,
pledge, lien, issue or re-issue, gift or any other voluntary transaction creating
an interest in the property.
"(33) 'Purchaser' means a person who takes by purchase."
35. Yentzer v,Taylor Wine Co., 414 Pa. 272, 199 A.2d 463 (1964).
36. Webster's New International Dictionary (2d ed. 1960) under definition of "buy"
says: "Buy, purchase are in meaning convertible terms,"
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[T]here was an extended period during which courts proceeded
to invent a remarkable variety of highly ingenious, and equally unconvincing theories . . . to get around the lack of privity between
the plaintiff and defendant. The unusual industry of Mr. Cornelius
W. Gillam3 7 has collected no less than twenty-nine such triumphs
of juridical technique.
....38
In a footnote he then summarizes these twenty-nine "triumphs of juridical technique." 39 It seems fair to ask if the Yentzer decision constitutes example number 30 or does it begin a series of twenty-nine
examples in the new era of the Uniform Commercial Code? In
either case it is travel into the morass of exceptions which surrounds the rule of privity in warranty actions.
In any event, the Yentzer decision found it necessary to provide
the exception to section 2-318 by resort to Pennsylvania case law.
The Code section must then be considered as an impediment which
blocks the trend toward relaxation of the privity rule in warranty
cases, rather than an aid or encouragement to the trend. In 1963
California became the twenty-eighth state to adopt the Code, 40 but
specifically omitted section 2-318. 41 The recommendations for omission considered the section to be a "step backward" which would
"contract the scope of a seller's warranty under the California decisions." 42
Only two states have modified section 2-3 18 of the Code in such
a manner as to "anticipate the trend of the American case laws
somewhat and cast privity to the winds."' 43 Wyoming adopted the
UCC in 1961 (effective January 1, 1962) 44 and as adopted by that
state section 2-3 18 reads:
A seller's warranty whether express or implied extends to any person who may reasonably be expected to use, consume, or be affected
37. Gillam, Products Liability in a Nutshell, 37 Ore. L. Rev. 119, 153-55 (1957).
38. The Assault, supra note 8, at 1124.
39. Id. at 1124, n.153.
40. Cal. Commercial Code, ch. 23A, General Introduction at p. LVII. As of Sept. 16,
1964, thirty jurisdictions (29 states and D.C.) have adopted the Code. 1 CCH Installment
Credit Guide 700 (1964).
41. Cal. Commercial Code § 2318.
42. Cal. Commercial Code § 2318, Comment 1.
43. Wyo. Legislative Research Comm., Research Publication No. 1, The Uniform
Commercial Code, (July, 1960), at p. 40. Pertinent portion of this publication appears
in Carrington, The Uniform Commercial Code-Sales, Bulk Sales and Documents of
Title, 15 Wyo. L.J. 1, 11 (1960).
44. Wyo. Stat. Ann. § 34-10-105 (Supp. 1963).
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1965]
COMMENTS
by the goods and who is injured by breach of the warranty. A seller
45
may not exclude or limit the operation of this section.
Virginia has modified the section 41 to accomplish the same resultthe abolishment of privity as a defense.
The abolition of the requirement of privity in products liability
has been a continuing process, supported by a variety of doctrines.
Professor David H. Vernon has, in one short comment, succeeded in
amalgamating them all when he says:
[I]t should be recognized that the true basis for the destruction of
privity is merely that, as a matter of public policy, it is felt that the
technical requirements of privity have no place in a national distrib47
utive system such as we have in the United States.
The established trend is toward the abrogation of privity, either
by judicial pronouncement or by statutory action. A re-examination
and revision of section 2-3 18 is recommended for New Mexico.
The Wyoming
formulation appears to be a satisfactory model to
follow. 48
JOHN N. URTES
45. Wyo. Stat. Ann. § 34-2-318 (Supp. 1963).
46. See note 7 supra.
47. Vernon, The Uniform Commercial Code and New Mexico, Article 2-Sales 23,
(Div. of Research, Dept. of Government, Univ. of N.M. Publ. No. 50, 1957).
48. Braucher, The Uniform Commercial Code-A Third Look, 14 W. Res. L. Rev.
7, 15-16 (1962). The author recommends the Wyoming formulation to the Permanent
Editorial Board of the National Conference of Commissioners on Uniform State Laws
as "acceptable."